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Countersuit Filed Against Ohio Attorney General

American Home Mortgage Servicing, Inc. (AHMSI), headquartered in Texas, is fighting back against the lawsuit filed against them yesterday.
[IMAGE] Filed by Ohio Attorney General, Richard Cordray, the lawsuit against AHMSI alleges the company was under numerous violations of the Ohio Consumer Sales Practices Act. After receiving notice of the lawsuit yesterday, AHMSI immediately filed a countersuit against Cordray, disputing the allegations.
Since October 2008, AHMSI completed more than 67,000 non-HAMP modifications throughout the nation, representing more than 15 percent of its entire servicing portfolio. During this time, over 2,200 AHMSI customers in Ohio have entered into non-HAMP loan modifications. According to the company, in 79 percent of its non-HAMP modifications, borrowers experienced an average reduction of 30.5 percent in principal and interest payment.

AHMSI said through their non-HAMP modifications, 74.8 percent of their borrowers with modified loans are performing after six months, compared with the industry average of 60 percent.

From October 2008 to September 2009, AHMSI worked with 141 Ohio borrowers to sell their homes with a short payoff, rather than proceed to foreclosure. The company is also a member of the HOPE NOW Alliance, with its senior executives taking leadership roles in the organization.

Jordan Dorchuck, EVP and chief legal officer at AHMSI, said, ""Given our strong commitment to keeping borrowers in their homes and the specific, positive feedback we have received from many Ohio state and nonprofit agencies regarding our homeownership preservation efforts, AHMSI's management was dismayed when it received a letter last week from the Ohio Attorney General's office threatening to sue AHMSI for unfair servicing practices.""

After receiving the pre-suit letter, Dorchuck noted that AHMSI offered to meet with representatives from the Attorney General's office in an attempt to resolve any issues they may have regarding AHMSI's servicing practices, but the Attorney General's office refused to discuss the allegations before filing the suit.

""Rather than wait to be named as a defendant in a suit that AHMSI considers to be rash and without merit, we elected to petition an Ohio state court for a declaration that
AHMSI's servicing practices are fully compliant with Ohio law. AHMSI is proud of its many successful efforts to assist distressed homeowners and looks forward to judicial resolution of any questions that any party might have about our performance,"" Dorchuck said. ""Although we respect the Attorney General's commitment to serve the people of Ohio, we are convinced that these allegations are entirely without merit, and intend to defend ourselves vigorously against them.""

AHMSI, founded in 2008 in the midst of the mortgage crisis, specializes in servicing distressed residential mortgage loan portfolios. Currently servicing more than 500,000 loans, including approximately 17,000 loans in Ohio, AHMSI says it did not originate any of these loans.

In an effort to help borrowers in Ohio who encountered difficulty in meeting their loan obligations, AHMSI has participated in the federal Home Affordable Modification Program (HAMP), and the company has provided a HAMP solicitation letter to every AHMSI Ohio customer who is potentially eligible for the program. Since October 2008, the company initiated 6,800 HAMP modifications, with 173 of these being for their Ohio customers.

With a dedicated homeownership preservation office, AHMSI has participated in many Ohio homeownership preservation outreach events, bringing specialists onsite for face-to-face meeting to address loan borrowers' loan modification needs. In the year ending September 2009, AHMSI worked with 141 Ohio borrowers to sell them homes with a short payoff, rather than proceeding to foreclosure.

About Author: Brittany Dunn


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